Goldman "US Trade Surplus Surges, Raising Tariff Risks"
Analysis suggests that Donald Trump, the President-elect of the United States, 'bomb tariff' policy will affect not only China but also Asian countries as a whole.
According to CNBC on the 11th (local time), Andrew Tilton, Goldman Sachs Asia-Pacific Chief Economist, stated that although the US trade deficit with China has somewhat decreased since the Trump administration, the trade deficit with other Asian countries has significantly increased.
Economist Tilton said, "Since President-elect Trump and leading cabinet candidates are focusing on reducing the US trade deficit, a kind of 'whack-a-mole' approach to the rapidly increasing trade deficits risks imposing US tariffs on other Asian countries."
He added, "South Korea, Taiwan, and Vietnam have gained significant trade benefits compared to the US," noting, "South Korea and Taiwan's gains are due to their 'privileged position' in the semiconductor supply chain, while Vietnam benefits from China circumventing trade."
Former President Trump has repeatedly pledged to impose a 60% tariff on Chinese imports and a universal tariff of 10-20% on all imports. Tariffs are taxes on imports, but exporters do not pay them. Instead, companies importing those products pay, increasing costs.
South Korea's trade surplus with the US in 2023 is estimated to reach a record high of $44.4 billion. Automobile exports account for about 30% of total exports to the US.
Taiwan's exports to the US in the first quarter of this year reached a record high of $24.6 billion, a 57.9% increase compared to the same period last year. Vietnam's trade surplus with the US from January to September this year amounts to $90 billion. According to Goldman Sachs, India and Japan also record trade surpluses with the US.
Economist Tilton predicted, "Going forward, these Asian countries will likely use various means, such as increasing imports from the US if possible, to reduce their trade surpluses with the US and divert American attention."
Barclays Bank stated, "The area where President-elect Trump will have the greatest impact on emerging Asian countries is trade policy."
Brian Tan, an economist at Barclays, said that Trump's tariff policy is likely to bring greater pain to Asian economies, with Taiwan being more exposed to such threats than South Korea and Singapore.
Additionally, Goldman Sachs expects the trend of China relocating supply chains to Southeast Asia, India, and Mexico to continue. It also forecasts that the US will impose an average tariff of 20% on Chinese imports in the first half of next year.
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